In an interview with Robert Shiller when asked about whether we have hit bottom he said “When people phrase is that way, they say ‘we’ve reached the bottom.’ That suggests that we have the expectation of a major turning point right now. But I don’t see that. I don’t see any reason to think that prices are going to start heading up dramatically now. We do have some good news. Permits are up. Notably, the National Association of Homebuilders Housing Market Index is up and that’s a forward-looking index. But it’s not up very much. If you look at the rate of change it looks dramatic but it’s still at a low level.”

I feel he hit it right on the nose.  It’s a really good interview and I highly recommend reading it.

In this article, “Don’t rush to pay off your mortgage,” I think they describe it best by saying “When it comes to home loans, we’ve become a nation of debt-a-phobes.”  It is easy to think that leverage is bad after experiencing the worst downturn since the Great Depression but it’s not when used correctly.

“You could save a lot of interest by choosing a 15-year loan over a 30-year — about $63,000 after taxes on a $200,000 loan for someone in the 28 percent tax bracket. But ask yourself whether you can really afford the higher monthly payment — in this case, $1,420 versus $955. Have you maxed out your 401(k) and built up an emergency fund? Paid off credit cards? Funded insurance policies and, if you desire, college savings? If you haven’t, choose the 30-year loan. And if you have, choose the 30-year loan anyway and put the difference between the two payments in a savings or investment account. You’ll build up a nest egg that might keep you afloat (and in your house) if you lose your job or get sick. The strategy requires discipline; setting up automatic payments helps.”

A mortgage is a financial tool when used correctly and you can build a larger net worth by taking out a bigger and longer mortgage when putting your leftover monies to work elsewhere.

If you want to find out the limits for any other counties through Florida click on the link below, click on the First Time Homebuyer Program image in green, choose your County, and the Number of People Living in the Household:  http://www.floridahousing.org/

I have seen estimates stating that 29% of deals that go to contract and require a mortgage, don’t close. That number boggles my mind. It means that even after a buyer and seller come to terms on a sale (not an easy feat these days), 3 out of 10 transactions fall apart. What are some of the more common reasons?

• Appraisal issues – In many markets, we are still seeing declining values. Appraisers are in a difficult position, and with so many transactions (including seller’s concessions to assist buyers with closing costs) values aren’t always coming in at sales prices.
• Short Sales not being approved by the current lender – With so many sellers owing more than their home is worth, buyers’ proposals need to be sanctioned by the lender (who will be receiving less than they are owed). Some of the offers are too low, but often, the lender isn’t local and they really don’t know what the property is worth today.
• Bad pre-approvals from the loan officer – Today, loan officers who are not reviewing tax returns, analyzing bank statements, and asking for detailed explanations and documentation on credit blemishes, are truly hurting the customers. Issuing pre-approvals based on the representations of the customer is reckless and a cause for dismay later.
• A lack of transparency – Whether it’s a seller or agent not disclosing property issues, or a buyer trying to sneak things by an underwriter, too many people think they can cut corners. That is not the world we live in anymore. Everything is uncovered. Being honest in the beginning, gives you the best chance to overcome obstacles.

It is clear by the numbers that closing loans can be more difficult today. However, with proper planning and integrity, many of the challenges can be dealt with early and successfully. Agents documenting values of the homes, loan officers doing complete reviews of the loan profile up-front, and everyone telling the truth helps get deals to a successful conclusion and avoids horror stories.

So, when borrowers shop for loans on the old “price/product/service model”, how does a consumer differentiate between loan officers?

• Ask for referrals – If you have a friend, co-worker, or family member who had a good lending experience, ask who they used. Talk to people who deal with multiple lenders (real estate agents, attorneys, accountants, etc.) and leverage their comparative experience into making good choices. Loan officers who earn referrals typically go beyond price/product/service.
• Seek out a mortgage advisor – Even today, with limited loan programs, there are many factors to consider when choosing the right mortgage. Your future income, the length of time you expect to be in the home, and your risk tolerance should be discussed before ruling out adjustable rate mortgages, for example.
• Look for transparency – Demand a lender who freely and competently discusses rates and likely rate movements. Don’t buy into the idea that rates are conjured up in a mysterious way. Rates are derived by activities in the bond market and your loan officer should be able to explain, in layman’s terms, the factors that affect rates and upcoming events and economic reports, as well as, the most likely impact they will have.
• Accessibility of information – Are you looking for printed materials and/or videos to guide you through the process? How about online workshops or home buying seminars?
• Seek out a resource – You may need other professionals when buying a home (from insurance people, to home improvement people, to legal help). A good loan officer has a network of high quality referral partners to help you.

“Sunrise currently has a program that offers up to $2,000 to those purchase homes that are in short sale or foreclosure, and remodel those homes. “Upgrade on appliances, roof repair, landscaping, new AC, new hot water heater,” Mayor Ryan said. “The things people do to try to improve a house, now those costs will be paid for by the city as long as they move here.”

http://www.wsvn.com/news/articles/local/21006445228631/sunrise-offers-incentives-to-home-buyers/

Mortgage-backed securities, which move interest rates, are trading unchanged right now.  Interest rates paying NO Points in Fort Lauderdale and South Florida are as follows today on a $400,000 purchase price, 740 credit score, 25 day lock period, primary residence, single family detached home, with escrows are:

• 4% on a 30 year Conforming fixed rate mortgage with 20% down (APR 4.221%)
• 3.375% on a 15 Year Conforming Fixed rate mortgage with 20% down (APR 3.533%)
• 4% on a  30 year FHA fixed rate mortgage with 3.5% down (APR 4.89%)

Contact me for interest rates on Jumbo Mortgages and Adjustable Rate Mortgages (ARMs) in Fort Lauderdale and South Florida.  Rates are subject to change without notice.

• First Time Homebuyers only – someone who hasn’t owned their legal residence in the past 3 years.  Applies to the buyer and spouse even if the spouse isn’t going on the loan or deed.
• 3 years of tax returns for all borrowers and spouses
• You must have a minimum of a 620 middle credit score
• Anyone who will be on the deed and spouse must complete the 8 hour homebuyer education.  You will want to set this up immediately.   To find an approved counseling agency in your area – Click here
• You must be within the Household income limits.  To find out the income limits for your County click on the link below, click on the First Time Homebuyer Program image in green, choose your County, and the Number of People Living in the Household:  www.floridahousing.org
  • The household size is determined by the number of people  permanently residing in the property. 
  • For the Frequently Asked Questions – Click Here

In order to qualify you have to be within the income limits for your county and family size.  To find out the income limits for your County click on the link below, click on the First Time Homebuyer Program image in green, choose your County, and the Number of People Living in the Household:  www.floridahousing.org or contact me.